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Video: Alpert Sees Global Economic Forces Behind U.S. Jobs Data

by on June 3, 2011

June 3 (Bloomberg) — Dan Alpert, managing partner at Westwood Capital Management, David Semmens, U.S. economist at Standard Chartered Bank, and Michael Purves, chief market strategist and head of derivatives research at BGC Financial LP, talk about today’s May U.S. jobs report and the outlook for the labor market. They speak with Pimm Fox on Bloomberg Television’s “Taking Stock.” Duke Lane, president of Lane Packing Co., and Fort Worth, Texas, Mayor Mike Moncrief also speak. (Source: Bloomberg)

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Video: Alpert Sees Global Economic Forces Behind U.S. Jobs Data

Robert Reich: Back Toward Double-Dip

by Robert Reich on June 3, 2011

Huffington Post…

The May jobs report is a disaster — the weakest reading since September. Non-farm payrolls grew only 54,000 last month, according to the Labor Department’s Bureau of Labor Statistics. Private employment rose only 83,000 — the smallest growth since last June. Government payrolls dropped 29,000. The overall jobless rate rose to 9.1 percent. Together with plummeting housing prices, falling wages for non-supervisory workers, a paltry 1.8 percent growth in the first quarter, and a precipitous drop in consumer confidence, the picture should be clear to anyone able to see clearly. The recovery has stalled. We’re not in a double-dip yet, but the odds are increasing. The question is whether all this will wake up Washington, and stop the monumental distraction of the games being played over the debt ceiling and long-term budget deficit. The Republican lie that the nation’s long-term budget deficit is responsible for high unemployment would be laughable if it weren’t so tragically irrelevant to the current situation. The President cannot be reelected if the economy tanks. He may not even be reelected on an anemic recovery in which unemployment remains nearly this high. But all incumbents are endangered. Republican House members from swing districts are toast if they don’t show voters they’re actively working on the twin problems of jobs and wages. Several steps need to be taken right away. Exempt the first $20,000 of income from payroll taxes for two years. Lend money to cash-starved state and local governments. Initiate a new WPA for the long-term unemployed. Amend bankruptcy laws to allow homeowners to include their prime residencies in personal bankruptcy (giving them more bargaining leverage with their lenders to renegotiate mortgage loans). Above all: Washington needs to show Americans it’s taking seriously the ferocious problem of jobs and wages, and the trend back toward a double-dip. Robert Reich is the author of Aftershock: The Next Economy and America’s Future , now in bookstores. This post originally appeared at RobertReich.org .

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Robert Reich: Back Toward Double-Dip

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U.S stocks close in red on gloomy labor data…

June 3, 2011

U.S stocks close in red on gloomy labor data…

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Online Labor Demand Rises To Pre-Recession Levels As Labor Market Slows

June 2, 2011

NEW YORK — The unemployment rate remains high, but online demand for workers has reached levels not seen since before the recession, according to a new report. Online labor demand, as measured by help-wanted advertisements posted on the Internet, rose in May by 148,800 listings to a high of 4.5 million advertised vacancies. That number hasn’t been reached since May 2005, according to the Conference Board , a global independent business membership and research association. The findings mean that as of April, for every three workers out of a job, there is one advertised vacancy. That stands in contrast to the Bureau of Labor Statistics’ latest ratio , which showed approximately four unemployed workers for every opening in March. “Overall, the trend in online advertised vacancies has been positive this year,” said June Shelp, Vice President at the Conference Board and author of the report. But economists, including Shelp, caution to take the Conference Board’s numbers with a grain of salt. The caveat, Shelp said, is that “while we have now returned to the pre-recession levels of labor demand, the big difference today is the larger number of unemployed workers that are seeking jobs compared to four years ago.” Positions advertised online are not a guarantee of employment, and vacancies can take months to fill. Plus, a given vacancy might not be filled by an unemployed worker. In fact,

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Illinois Restaurateur Owes Workers $1 Million In Back Pay, Damages

May 31, 2011

WASHINGTON — Workers got a pretty raw deal at Dolores Onate’s two Mexican restaurants in Decatur, Ill. Not only were the waiters and kitchen workers stiffed on overtime and minimum-wage requirements, they were actually forced to pay their wages back directly to Onate, according to a federal court case decided this month. Due to violations of fair labor laws, Dolores Onate and her restaurants’ manager, brother Ricardo Onate, have been ordered to pay a whopping $1.15 million in back pay and damages to 64 workers — an unusually high penalty for a small-business restaurateur. “It really took a lot of gall for an employer to request that money be returned,” labor department spokesman Scott Allen told the Huffington Post. “It’s absolutely unacceptable. That’s why the penalty was as severe as it was.” From 2006 to 2009, the wait staff at El Matador and El Caporal restaurants had been allowed to keep their cash tips, but they were required to endorse their paychecks back to the restaurant, according to the decision. Kitchen staff, busboys, and dishwashers at the restaurants were paid less than the minimum wage, did not receive the overtime pay due them, and were also ordered to return a portion of their paychecks to the ownership. Employees were also told not to punch in until a certain time, even though they may have started work much earlier. Many of the workers were Hispanic immigrants. A lawyer for the Onates did not return a call seeking comment. Ted Smukler of Interfaith Worker Justice , a Chicago-based non-profit that advocates for low-wage workers, said the Decatur case is indicative of widespread wage violations in American restaurants. “It’s incredibly prevalent throughout the entire restaurant industry,” Smukler said. “A lot of times it’s not just that workers don’t understand their rights, but that they don’t feel it’s safe to assert them, depending on their immigration status or their need for the job in this economy.” Smukler added that many violations go unreported, and that many victims simply move on to other restaurant jobs. His group recently surveyed workers from 200 restaurants in Chicago and found that almost none of them were in full compliance with wage laws. According to a recent report from Restaurant Opportunities Centers United, nearly half of restaurant workers say they work overtime for which they’re not paid, and roughly 90 percent said they don’t receive paid sick days and don’t receive health insurance through their employer. Many workers also don’t receive the minimum wage. Employers are supposed to pay tipped employees a base wage — either the $2.13 federal rate or the state rate, whichever is higher — that, combined with the employees’ tips, should meet the normal minimum wage. If not, the employer is supposed to make up the difference. The labor department investigation found that many of the workers at El Matador and El Caporal received wages that fell well short of the state’s minimum. “The defendants in this case willfully and repeatedly violated federal labor standards,” labor secretary Hilda Solis said in a statement . “These vulnerable workers will receive their rightful pay.” Allen said that after its investigation the labor department had tried to work with the Onates to get the workers paid properly. Only when the Onates declined to cooperate did the labor department file suit against them. “It’s sad, actually,” Allen said. “No one should have to go through all this to receive their just pay.”

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Jobless Claims Down As Labor Market Could Be Picking Up

May 19, 2011

WASHINGTON – The number of Americans filing new claims for unemployment benefits fell more than expected last week, offering hope the labor market recovery remains on track. Initial claims for state unemployment benefits fell 29,000 to a seasonally adjusted 409,000, the Labor Department said on Thursday, continuing to unwind the prior weeks’ spike. Economists polled by Reuters had forecast claims dropping to 420,000. The prior week’s figure was revised up to 438,000 from the previously reported 434,000. “Clearly what it shows is an ongoing healing in the labor market. The recent data have been skewed by special factors like the Easter holiday and supply chain issues coming out of Japan,” said Neil Dutta, a U.S. economist at Bank of America Merrill Lynch in New York. “Some of the increase in jobless claims have been organic due to the slowing in the economy.” U.S. stock index futures extended gains on the report, while prices for government debt widened losses. The dollar rose against the yen. The four-week moving average of unemployment claims, a better measure of underlying trends, rose 1,250 to 439,000 – the highest level since mid-November. The data covers the survey period for the government’s closely watched employment report for May, which will be released early next month. The recent jump in claims, blamed on auto layoffs because of supply chain disruptions from March’s Japanese earthquake and problems with adjusting data for seasonal variations, had raised fears of a pull back in the pace of job creation. Employers added 244,000 jobs in April, the most in 11 months. However, the unemployment rate rose to 9 percent from 8.8 percent in March. Despite the fall, claims held above the 400,000 mark for a sixth straight week, indicating payroll growth will only be gradual. The four-week average has now been above that level, which is normally associated with stable job growth, for four weeks in a row. A Labor Department official said only one state or territory, the Virgin Islands, had been estimated, indicating the report was largely clear of distortions. The number of people still receiving benefits under regular state programs after an initial week of aid fell 81,000 to 3.71 million in the week ended May 7. Economists had expected so-called continuing claims to fall to 3.72 million from a previously reported 3.76 million. The number of people on emergency unemployment benefits increased 53,398 to 3.47 million in the week ended April 30, the latest week for which data is available. A total of 7.94 million people were claiming unemployment benefits during that period under all programs. (Reporting by Lucia Mutikani; Editing by Neil Stempleman) Copyright 2011 Thomson Reuters. Click for Restrictions .

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The Recession’s ‘Lost Generation’

May 17, 2011

EW YORK (CNNMoney) — The brutal job market brought on by the recession has been hard on everyone, but especially devastating on the youngest members of the labor force. About 60% of recent graduates have not been able to find a full-time job in their chosen profession, according to job placement firm Adecco.

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Video: Blitz Sees `Dangerous’ Signals from Core Inflation Data

May 13, 2011

May 13 (Bloomberg) — Steve Blitz, economist at ITG Investment Research, talks about U.S. consumer-price report released today by the Labor Department and the economic implications. The consumer-price index increased 0.4 percent in April, matching the median forecast of economists surveyed by Bloomberg News and following a 0.5 percent advance in March. Blitz speaks with Lisa Murphy on Bloomberg Television’s “Fast Forward.” (Source: Bloomberg)

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Republicans Ratchet Up Attacks On Labor Board, White House Over Boeing

May 10, 2011

WASHINGTON — Gov. Nikki Haley (R-S.C.) joined a coalition of business interests and Republican lawmakers Tuesday in bashing the National Labor Relations Board for filing a controversial complaint against the Boeing Company last month. At a press conference in the U.S. Chamber of Commerce offices, Haley called the complaint “an unbelievable attack on not just right-to-work states but every state that’s attempting to put their people to work.” In the complaint that attracted Republicans’ ire, the labor board’s acting general counsel said Boeing broke the law in 2009, when it made plans to create a new production line for its 787 Dreamliner. The aerospace company chose to locate its line in South Carolina, rather than in Washington state, where it had an existing workforce of unionized employees. The NLBR’s acting general counsel said Boeing’s move was retaliation against its Washington employees with the International Association of Machinists and Aerospace Workers, who had gone on strike in the past. Unions have hailed the filing as a victory for workers, while business groups have called it a case of federal meddling in corporate decision-making. The complaint has thrown the future of the South Carolina factory into limbo. Although the NLRB has downplayed the significance of the complaint, Republican senators have nonetheless decried it as an attack on free enterprise and right-to-work states like South Carolina. Right-to-work laws prohibit agreements between unions and companies that make union membership a requirement of employment. Generally favored by Republicans and corporate interests, such laws are currently on the books in 22 states, particularly ones in the South. Dan Yager, general counsel of the HR Policy Association, argued at the press conference that Boeing is being “penalized” for negotiating with the machinists union. Even though he expects Boeing to win the case, Yager claimed the filing will have a chilling effect on companies trying to move into right-to-work states. “If you’re an employer who wants to stay out of court… sort of what the general counsel says is the law,” he said. With litigation that could last well over a year, the Boeing complaint is quickly becoming a significant campaign issue leading up to the 2012 elections: Republicans are looking to paint Barack Obama administration as anti-business and in the pocket of labor unions. That was certainly the theme of the Chamber event, where a host of Republican lawmakers took to the podium to knock not only the NLRB, but the White House as well. Last week, several Republicans vowed to block President Obama’s nominees to the labor board. Sen. Lindsey Graham (R-S.C.), who had tough words for the labor board last week, escalated his rhetoric Tuesday morning. He called the complaint “chilling” and “absurd.” “This is legal slander,” Graham added. “There has never been a case like this. … This is politics run amok.” Last week Graham and Sen. Lamar Alexander (R-Tenn.) said they planned on introducing a bill written expressly to nullify the April 20 Boeing complaint. On Tuesday, the lawmakers said the bill is still being tweaked, but will probably be introduced this week. Sen. Jim DeMint (R-S.C.) leveled his criticism directly at NLRB acting general counsel Lafe Solomon, who filed the complaint. “It is absurd in this country that represents free enterprise that one unaccountable, unelected, unconfirmed acting general counsel can threaten thousands of jobs and billions of dollars in investments. This is something you’d expect in a third world country,” he said. “It is thuggery at its best.” “The pandering to unions has gotten so far out of proportion, it’s difficult to accept,” DeMint added, in reference to the White House. In a statement yesterday, Solomon defended the move . “There is nothing remarkable or unprecedented about the complaint issued against the Boeing Company,” he wrote. “It was issued only after a thorough investigation in the field.” In a recent interview with the New York Times , Solomon said he filed the complaint against Boeing because of strong evidence it had tried to move the production line out of retaliation. In company documents and news interviews, Boeing executives had explicitly cited the strikes as a reason for expanding into South Carolina. Sen. Rand Paul (R-Ky.) wondered aloud whether the Boeing complaint indicated the White House had an “enemies list.” “Mr. President… is this decision based on the fact that South Carolina appears to be Republican state?” Paul asked. “That South Carolina is a right-to-work state? I find this appalling, and I respectfully ask the president to rescind this assault on businesses.” Asked whether she agreed with Paul, if she believed the White House may have an enemies list, Gov. Haley said, “Right now no one knows what the White House is doing.”

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Robert Kuttner: The Jobs Numbers and the President’s Job

May 9, 2011

The economy added 244,000 jobs in April. That should be good news for President Obama and the Democrats. But according to the Economic Policy Institute , at this rate of job growth it would take until the fall of 2016 for unemployment to come back down to where it was before the recession. The next election, unfortunately, is in 2012. Among the not-so-great items in the Labor Department’s report : Fourteen million people are still officially unemployed, and millions more have given up looking for work. Counting those out of the labor force or working part time but wanting full time jobs, the total number of unemployed or underemployed was just under 25 million — not significantly better than at the pit of the recession. The number of people with involuntary part time work actually rose by 167,000 in April. Among young workers, 24 or younger, the jobless rate was a sickening 17.6 percent. And among African Americans, 16.1 percent were out of work. These happen to be two groups who voted with great enthusiasm for the president in 2008. Despite the growth in employment, the overall percentage of Americans in the labor force did not increase. The workforce is still more than a million people smaller than it was a year ago — meaning that the economy will need to grow at a much faster rate to soak up the unemployed. There still 5.8 million workers who have been jobless for more than six months, still close to an economic record. The longer they stay unemployed, the less likely they are to ever find a job. Employers tend to give preference to job seekers who have jobs, or who have been out of work for short periods. While the private sector added more than a quarter million jobs, the public sector kept laying off workers. State and local government shrank by another 22,000 in April. This is a confession of a policy failure. In a severe economic downturn, government should be adding jobs to make up for the softness of the private sector. But with austerity fever sweeping both parties, the idea of a public jobs program is off the table. President Obama had a good couple of weeks. He deftly surfaced his long-form birth certificate, a move whose timing baffled pundits until the other shoe dropped — and the public appreciated that he was grappling with very consequential matters while his opponents were mired in trivia. The mission to capture or kill Osama bin Laden displayed presidential nerve and leadership that has often seemed missing in this administration. But despite the president’s enhanced stature on national security issues and his success in showing up his critics, the 2012 election will be mainly about the economy. With so many Americans still out of work, a large number of voters have a co-worker, friend, or family member suffering from joblessness. It is easy to construct a national scenario in which Obama is plainly a more formidable candidate than any likely Republican nominee. The trouble is that we elect presidents state by state. And it will be hard for an incumbent to win if the economy in the key swing states of the Midwest remains deeply depressed. It might be easier if the president were pushing hard for a robust recovery program while the Republicans were promoting slash-and-burn austerity. Obama could then point to the sluggish recovery and clearly lay it at the Republicans’ door. But Obama himself, though he has admirably defended Social Security and Medicare, forcing Republicans to distance themselves from Rep. Paul Ryan’s proposed plan to turn Medicare into a voucher, is nonetheless giving more attention to deficit reduction than to job creation. Long after the skirmishes over this year’s budget cease dominating the news, when the government stays open and the United States does not default on our national debt, the major issue before the voters in 2012 will still be the condition of the economy, not the deficit. Though Obama’s version of fiscal austerity is kinder and gentler than that of the Republicans, cutting the deficit while the recovery is still fragile could well slow growth and blur political responsibility. The ambiguous April jobs numbers are a signal not of green shoots but of the perils of premature belt-tightening. There are now three parties of austerity dominating the economic debate, while the party of jobs and growth is scarcely heard from. We have the Republicans demanding draconian cuts in the name of fiscal responsibility, even though their proposed tax reductions would leave the deficit almost where it was. Then there is the Wall Street austerity party, willing to entertain tax increases (on others) as well as program cuts. And finally, the White House, with a more moderate forced march to fiscal discipline, but still a misplaced emphasis on deficit reduction. In November 2012, if unemployment is still high, Obama will get scant credit for a better fiscal picture. He owes it to his supporters, to America’s millions of idled workers, and to his own re-election prospects to pay more attention to jobs. Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril .

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Video: Englund Says U.S. Payrolls Report `Defied’ Market Fears

May 6, 2011

May 6 (Bloomberg) — Michael Englund, chief economist at Action Economics LLC, talks about April payrolls data released today by the Labor Department and outlook for the economic recovery. Payrolls expanded by 244,000 last month, the biggest gain since May 2010, after a revised 221,000 increase the prior month. The jobless rate climbed to 9 percent, the first increase since November, a separate survey of households showed. Englund speaks with Betty Liu on Bloomberg Television’s “In the Loop.” Richard Grasso, former chairman and chief executive officer of the New York Stock Exchange, also speaks. (Source: Bloomberg)

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Video: Englund Says U.S. Payrolls Report `Defied’ Market Fears

May 6, 2011

May 6 (Bloomberg) — Michael Englund, chief economist at Action Economics LLC, talks about April payrolls data released today by the Labor Department and outlook for the economic recovery. Payrolls expanded by 244,000 last month, the biggest gain since May 2010, after a revised 221,000 increase the prior month. The jobless rate climbed to 9 percent, the first increase since November, a separate survey of households showed. Englund speaks with Betty Liu on Bloomberg Television’s “In the Loop.” Richard Grasso, former chairman and chief executive officer of the New York Stock Exchange, also speaks. (Source: Bloomberg)

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Video: Englund Says U.S. Payrolls Report `Defied’ Market Fears

May 6, 2011

May 6 (Bloomberg) — Michael Englund, chief economist at Action Economics LLC, talks about April payrolls data released today by the Labor Department and outlook for the economic recovery. Payrolls expanded by 244,000 last month, the biggest gain since May 2010, after a revised 221,000 increase the prior month. The jobless rate climbed to 9 percent, the first increase since November, a separate survey of households showed. Englund speaks with Betty Liu on Bloomberg Television’s “In the Loop.” Richard Grasso, former chairman and chief executive officer of the New York Stock Exchange, also speaks. (Source: Bloomberg)

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Video: Solis Says Worker Training Critical to Job Growth

May 6, 2011

May 6 (Bloomberg) — U.S. Labor Secretary Hilda Solis talks about the April U.S. jobs report released today and the outlook for the economy. Payrolls increased by 244,000 workers last month, the biggest gain since May 2010, the Labor Department said. The jobless rate climbed to 9 percent. Solis speaks with Betty Liu on Bloomberg Television’s “In the Loop.” Richard Grasso, former chairman and chief executive officer of the New York Stock Exchange, also speaks. (Source: Bloomberg)

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Video: Solis Says Worker Training Critical to Job Growth

May 6, 2011

May 6 (Bloomberg) — U.S. Labor Secretary Hilda Solis talks about the April U.S. jobs report released today and the outlook for the economy. Payrolls increased by 244,000 workers last month, the biggest gain since May 2010, the Labor Department said. The jobless rate climbed to 9 percent. Solis speaks with Betty Liu on Bloomberg Television’s “In the Loop.” Richard Grasso, former chairman and chief executive officer of the New York Stock Exchange, also speaks. (Source: Bloomberg)

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Video: Solis Says Worker Training Critical to Job Growth

May 6, 2011

May 6 (Bloomberg) — U.S. Labor Secretary Hilda Solis talks about the April U.S. jobs report released today and the outlook for the economy. Payrolls increased by 244,000 workers last month, the biggest gain since May 2010, the Labor Department said. The jobless rate climbed to 9 percent. Solis speaks with Betty Liu on Bloomberg Television’s “In the Loop.” Richard Grasso, former chairman and chief executive officer of the New York Stock Exchange, also speaks. (Source: Bloomberg)

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Video: Solis Says Worker Training Critical to Job Growth

May 6, 2011

May 6 (Bloomberg) — U.S. Labor Secretary Hilda Solis talks about the April U.S. jobs report released today and the outlook for the economy. Payrolls increased by 244,000 workers last month, the biggest gain since May 2010, the Labor Department said. The jobless rate climbed to 9 percent. Solis speaks with Betty Liu on Bloomberg Television’s “In the Loop.” Richard Grasso, former chairman and chief executive officer of the New York Stock Exchange, also speaks. (Source: Bloomberg)

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‘Special Factors’ Blamed For Big Jump In Unemployment Claims

May 5, 2011

WASHINGTON — The number of people applying for unemployment benefits surged last week to the highest level in eight months, a troubling sign a day ahead of the government’s report on April employment. The Labor Department said Thursday that the 43,000 spike in applications to a seasonally adjusted 474,000 last week was largely the result of unusual factors, including a high number of school systems in New York that closed for spring break. Still, it marked the third increase in four weeks. The four-week average, a less volatile measure, rose for the fourth straight week to 431,250. Applications have jumped 89,000, or 23 percent, in the past four weeks. “The trend is clearly upward, so that’s disconcerting,” said Kurt Karl, chief U.S. economist for Swiss Re. “When you get three or four weeks in a row of special factors, they’re no longer so special.” Applications near 375,000 are typically consistent with sustainable job growth. Weekly applications peaked during the recession at 659,000. Rising unemployment applications and other weak economic data this week have prompted some analysts to worry that higher fuel prices may be causing employers to slow their pace of hiring. The government is scheduled to release its April jobs report on Friday. Economists are projecting that the economy likely added 185,000 jobs in April and the unemployment rate may remain 8.8 percent, but some are now saying the numbers could be lower. Thursday’s report also doesn’t bode well for hiring in May, economists said. A Labor Department spokesman blamed much of the latest increase on the unexpected spike caused by New York schools. That resulted in 25,000 layoffs. The department didn’t anticipate the closures when making seasonal adjustments, the spokesman said. The employees affected were bus drives and cafeteria workers, not teachers. One economists was skeptical that school recesses, presumably that have been on the calendar all year, would be difficult to account for. “Whatever school holidays may have occurred in New York were most likely associated with the Easter and Passover holidays, which should not have come as a surprise to those who calculated the seasonal adjustment factors for this year,” said Joshua Shapiro, chief U.S. economist at MFR Inc. Other factors also contributed to the increase, the Labor spokesman said. Oregon launched its own extended unemployment benefit program, which caused an increase in overall applications in the state for unemployment benefits. And auto-related layoffs rose, Some companies have shut down or slowed production because of parts shortages stemming from the earthquake in Japan. Those disruptions are mostly affecting Japanese automakers with plants in the North America. Honda Motor Corp. has slowed production at 10 of its U.S. and Canadian plants. Toyota has cut its U.S. production by two-thirds. Both have said they aren’t laying off workers. But the slowdowns also affect auto-supply companies. Still, applications have risen sharply in recent weeks, raising concerns that high gas and food prices are cutting into consumer spending and slowing the economy. Businesses are also facing higher costs for raw materials, which reduce profit margins. They may be cutting back on hiring as a cost-saving measure. The national average for gas was $3.99 a gallon on Thursday, according to the AAA Daily Fuel Gauge. That is 30 cents higher than a month earlier. Other recent data have also pointed to a weaker job market. A private trade group said Wednesday that a measure of employment growth in the service sector, which employs 90 percent of the work force, slowed for the second straight month. The report, by the Institute for Supply Management, still showed that employment rose, but at the slowest pace in 7 months. The number of people continuing to receive benefits rose 74,000 to 3.7 million. Millions more unemployed are receiving aid from extended benefit programs put in place during the recession. All told, more than 8 million people received unemployment benefits for the week ending April 16, the most recent data available. That was 170,000 fewer than the previous week.

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U.S. U. of Michigan Confidence Index Shows Sentiment Gains on Labor Market

April 29, 2011

U.S. U. of Michigan Confidence Index Shows Sentiment Gains on Labor Market

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Jobless Claims Rise To Highest Level Since January, Report Shows

April 28, 2011

New U.S. claims for unemployment benefits surprisingly rose last week to their highest level since January in a sign an anticipated recovery in labor markets may take time, a government report showed on Thursday. Initial claims for state unemployment benefits jumped 25,000 to a seasonally adjusted 429,000, up from a slightly upwardly revised 404,000 the preceding week, the Labor Department said. Economists polled by Reuters were expecting claims to slip to 392,000 from the previously reported 403,000. Jobless claims below 400,000 are associated with steady job growth. The four week moving average, a better measure of underlying trends, climbed to 408,500 from 399,250 in the previous week. It was the highest for the four-week average since February. The number of people still receiving benefits under regular state programs after an initial week of aid tumbled a more-than-expected 68,000 in the week ended April 16 to 3.64 million, the lowest level since September, 2008. Analysts anticipated a drop in continued claims to 3.68 million. (Reporting by Mark Felsenthal, Editing by Chizu Nomiyama) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Recovery Slows As Inflation Arrives

April 27, 2011

The Federal Reserve said growth will lag this year as the central bank finally acknowledged Wednesday what most Americans have long since realized: “Inflation has picked up.” The Fed’s statement, a customary event at the conclusion of every policy meeting, is the status update traders, bankers, businessmen and policy makers use to gauge the health of the U.S. economy. The Fed’s recognition of rising inflation did not affect its easy-money policy, though. The main interest rate will remain anchored near zero percent. Its asset-purchase program will also continue and run through its scheduled completion in June. It will be another “couple of meetings before action,” Fed Chairman Ben Bernanke said during a news conference. There are five more meetings scheduled this year. The Fed’s preferred measure of inflation guides its policy decisions. That index, which is about a full percentage point lower than what consumers experience at the pump or when buying food at the register, strips out volatile prices that are not always representative of the broader price of goods. By the Fed’s measure, inflation is not yet a worry. The recovery is “proceeding at a moderate pace,” the Federal Open Market Committee, the Fed’s main policy making body, said in its statement. Last month, the recovery was simply “on a firmer footing.” The Fed lowered its estimates for growth by about half a percentage point. In January, the central bank forecast U.S. gross domestic product to rise about 3.4 to 3.9 percent in 2011 during the final three months of the year. It now forecasts GDP to increase by about 3.1 to 3.3 percent. Even though growth is expected to be lower, the Fed predicted reduced unemployment compared to its earlier estimate as well — even though the measures typically move in opposite directions. Policy makers are more confident in the strength of the labor market, which they said is finally improving, albeit “gradually.” Last month, the Fed would only say that it appeared to be getting better. The unemployment rate stood at 8.8 percent at the end of March, according to the Labor Department. The central bank forecasts unemployment to average 8.4 to 8.7 percent during the last three months of the year, a slight improvement from January’s forecast of 8.8 to 9.0 percent. But the part of the Fed’s statement that will likely be parsed by traders on Wall Street is the realization that “inflation has picked up in recent months,” which the Fed attributes to rising energy and commodity prices. Most Americans began recognizing this a few months ago. Last month, prices including food and energy rose 2.7 percent on an annual basis, Labor Department data show. Bernanke said the rate is “noticeably higher” than normal. The price of food eaten at home has risen 3.6 percent. Meats, poultry, fish and egg prices are up 7.9 percent. The average price for unleaded gasoline stands at $3.88 per gallon, according to the American Automobile Association. A year ago today, fuel cost $2.86 per gallon. It’s risen 36 percent, a development Bernanke acknowledged is causing pain for working families. Prices have increased so much so fast that it’s eating into incomes and purchasing power. Hourly earnings are up only 1.7 percent over the past year, according to the Labor Department. But, when factoring inflation, wages are down 1 percent . That statistic is part of the reason why the Fed has been so aggressive in keeping interest rates as low as possible, a policy it reaffirmed Wednesday. Low interest rates spur borrowing, which should lead to spending, investing and, theoretically, hiring and higher wages. The Fed will keep the main interest rate anchored at 0 percent and will continue its asset-purchase program through completion in June, it said. The central bank has about $2.7 trillion in Treasuries and mortgage-linked securities. Another reason behind the Fed’s continued aggressiveness in the face of rising consumer prices — firms like Nike and Wal-Mart say they’re passing on commodity price increases to customers — is the central bank’s preference for an alternative measure of inflation. The Fed looks at so-called core inflation , a measure that strips out food and energy prices, when gauging the inflation rate that will guide its policy decisions. By that measure, prices are up only 0.9 percent in the year ending in February, according to the Commerce Department. The Fed aims to maintain the rate at about 2 percent. “Measures of underlying inflation are still subdued,” the Fed said Wednesday. The inflationary effect of higher commodity prices will be “transitory.” But the central bank’s inflation forecasts surged. In January, the Fed estimated that prices will rise at an annual rate of 1.3 to 1.7 percent during the final three months of the year. It now projects prices to rise 2.1 to 2.8 percent, about a full percentage point higher. Bernanke faces a dilemma, reckoned Bernard Baumohl, chief economist of the Economic Outlook Group. “There is no greater curse on Fed policymakers than the combination of a slowing economy and accelerating inflation, especially when both are largely the result of events taking place outside the U.S.,” Baumohl wrote in a note to clients. “In this instance, it is the robust demand for food and fuel coming form fast-growing emerging countries and the geopolitical turmoil that has spread across the oil-rich regions of North Africa and the Middle East. And neither of these foreign dynamics show signs of de-escalating.”

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Initial Jobless Claims Fall Slightly, But Remain Above 400,000

April 21, 2011

The number of Americans filing new claims for unemployment benefits fell last week but held above the key 400,000 level, hinting at some loss of momentum in the labor market recovery. Initial claims for state unemployment benefits fell 13,000 to a seasonally adjusted 403,000, the Labor Department said on Thursday, unwinding some of the prior week’s quarter-end jump. Economists polled by Reuters had forecast claims slipping to 392,000. The prior week’s figure was revised up to 416,000 from the previously reported 412,000. The four-week moving average of unemployment claims, a better measure of underlying trends, rose 2,250 to 399,000. “It gives the impression that the momentum of labor market improvement is a bit disappointing at this point,” said Sean Incremona, an economist at 4Cast in New York. “We are still looking at a moderate recovery, so near-term we might have to edge lower some employment calls. I think we are still going to see the recovery sustained.” The claims data covered the survey period for April’s nonfarm payrolls report, which will be released in early May. Employers added 216,000 jobs in March, the most in 10 months, and the unemployment rate slipped to a two-year low of 8.8 percent from 8.9 percent. U.S. Treasury debt prices extended gains on the report and the dollar fell to session lows against the yen. Jobless claims below the 400,000 mark are usually associated with steady employment growth. Despite the increase last week, the four-week average has now been below that level for an eighth straight week. A Labor Department official said three states — Pennsylvania, Virginia and Alaska — had been estimated for last week’s data, raising the possibility for large revisions next week. The number of people still receiving benefits under regular state programs after an initial week of aid fell 7,000 to 3.70 million in the week ended April 9, the lowest level since September 2008. Economists had expected so-called continuing claims to slip to 3.67 million from a previously reported 3.68 million. The number of people on emergency unemployment benefits dropped 23,693 to 3.53 million in the week ended April 2, the latest week for which data is available. A total of 8.3 million people were claiming unemployment benefits during that period under all programs. (Reporting by Lucia Mutikani, additional reporting by Chris Reese in New York; Editing by Padraic Cassidy) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Video: Initial Jobless Claims in U.S. Fall Less Than Forecast

April 21, 2011

April 21 (Bloomberg) — New applications for unemployment benefits in the U.S. fell less than forecast last week, indicating the labor market will take time to improve. Jobless claims decreased by 13,000 to 403,000 in the week ended April 16, Labor Department figures showed today in Washington. Bloomberg’s Michael McKee reports. (Source: Bloomberg)

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Video: Tessera’s Nothhaft Says Patent Backlog Hurts Jobs Growth

April 15, 2011

April 15 (Bloomberg) — Henry Nothhaft, chief executive officer of Tessera Technologies Inc., speaks about a backlog at the U.S. Patent and Trademark Office and the impact on innovation and the labor market. He talks with Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Video: UBS’s Harris Says Fed Should Start `Unwinding’ Easing

April 15, 2011

April 15 (Bloomberg) — Maury Harris, chief economist at UBS Securities, talks about U.S. consumer prices in March and Federal Reserve monetary policy. The consumer price index excluding volatile food and energy charges rose 0.1 percent, according to the Labor Department. Harris speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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Soaring Prices Still Don’t Indicate Real Inflation, Economists Say

April 15, 2011

Despite American consumers being hard hit by rising gas and grocery prices, federal regulators continue to insist the country need not fear inflation. Gas prices, which rose nearly 6 percent in March alone, are now almost 28 percent higher than they were a year ago, according to figures from the Bureau of Labor Statistics released Friday. Overall, the Consumer Price Index, a closely-watched measure of inflation, rose 0.5 percent in March, the Labor Department reported. The Consumer Price Index tracks changes in the cost of a virtual basket of goods for consumers in cities across the country. Rising food and gas prices accounted for almost three quarters of the March CPI increase. Those findings are in line with economists’ expectations . Still, the Federal Reserve has no plans to combat inflation by raising interest rates ; many economists argue that higher food and energy prices do not necessarily trigger overall price increases for goods and services. “Prices for energy are certainly putting pressure on headline CPI,” said Constance Hunter, Chief Economist at investment banking firm Aladdin Capital. “We saw this in the summer in 2008, when due to oil prices, the CPI got up 5.53 percent. But the point is it didn’t stay there because we had demand destruction.” As gas prices spiked in summer 2008, Hunter noted, many Americans changed their driving habits, opting to take more public transport and start carpooling rather than pay higher prices. That caused oil demand to fall, and prices followed. Now again, there is some indication Americans are already cutting back on driving . The strongest evidence counteracting inflationary fears, however, lies in the core inflation level, which does not include volatile food and energy prices and is widely considered to be a more accurate inflationary predictor. According to that BLS measurement, inflation only inched up 0.1 percent in March — the smallest increase this year — suggesting core inflation is on track to rise 1.2 percent overall in 2011. Inflation below 2 percent normally doesn’t trigger alarm at the Federal Reserve. “The Fed tends to see through temporary increases in headline inflation that are driven by rising fuel and food costs,” said Sal Guatieri, senior economist at financial services provider BMO Capital Markets. “Because the view is those costs cannot rise infinitely.” What is clear, though, is that many Americans are feeling the pinch of those rising costs anyway. “People are still spending very cautiously,” Guatieri noted. Higher gas prices buoyed just a 0.4 percent jump in retail sales in March, according to figures released by the Commerce Department on Wednesday. Consumer spending, which makes up 70 percent of U.S. spending, has risen for nine consecutive months, jumping over 7 percent since March 2010. Sales at gas stations accounted for almost 11 percent of overall retail sales in March — a sign March’s spending increase was more a result of rising costs than increasing optimism.

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Video: Harris Says Easing Lending Standard Is Boost to Hiring

April 1, 2011

April 1 (Bloomberg) — Maury Harris, chief economist at UBS Securities, talks about the correlation between banking lending standards and the jobs market. The U.S. economy added more jobs than forecast in March and the unemployment rate declined to a two-year low of 8.8 percent. Payrolls increased by 216,000 workers last month after a revised 194,000 gain the prior month, the Labor Department said today in Washington. Harris speaks with Melissa Long on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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Video: Riccadonna Says Improved `Underlying Trend’ in U.S. Jobs

April 1, 2011

April 1 (Bloomberg) — Carl Riccadonna, senior U.S. economist at Deutsche Bank Securities Inc., talks about the U.S. employment report for March and economy. The unemployment rate unexpectedly dropped to a two-year low of 8.8 percent as employers created more jobs than forecast, adding to evidence of a recovery in the labor market. Riccadonna speaks with Tom Keene and Michael McKee on Bloomberg Television’s “Surveillance Midday.” (Source: Bloomberg)

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Unemployment Rate Falls Again In March, Economy Adds 216,000 Jobs

April 1, 2011

In March, the U.S. economy added 216,000 new jobs, beating Wall Street expectations and continuing a trend of solid job growth. This is the second straight month of gains in the 200,000 range — the benchmark number that economists say the American economy must hit, month over month, in order to bring the unemployment down to pre-recession levels in 5 years. The unemployment rate dropped from 8.9 to 8.8 percent, according to the Bureau of Labor Statistics data released this morning. The labor force participation rate held steady, indicating that the pool of millions of Americans who have grown too discouraged to seek work have not begun to return to the job market. “It’s a good report, a little better than expected, especially the dip in the unemployment rate for the right reasons,” said Stuart Hoffman, an economist at PNC Financial Group. “More people are finding work. It’s not just people disappearing in the statistical cracks,” he said. In January, for instance, the unemployment rate fell from 9.4 to 9 percent — but only 36,000 new jobs were created. “What’s been missing in the economy is job growth: well, we’ve now got two months of job growth back to back of over 200,000 jobs in the private sector,” Hoffman said. Some economists suspect that during the recession, the size of the American labor force shrank, as discouraged job seekers simply gave up looking for work and disappeared from government statistics. The current labor force measurements, economists say, may be more representative of the actual U.S. workforce. “The labor force participation rate has stabilized,” said Wells Fargo economist John Silvia. “We’re looking at a labor force now that’s a fair assessment of people actually in the labor force — I think those people have just gone out of the system. I think we’re looking at a new labor force participation rate, and a real distinction in terms of employment growth by sectors.” But other economists who follow the labor force participation rate closely caution that it’s too early to say whether the millions of Americans who dropped out of the labor force are gone for good. “There are still five unemployed workers per job opening, far worse than the worst month of the early-2000s recession,” Heidi Shierholz, an economist at the Economic Policy Institute, wrote in an email. “That’s not exactly a hospitable environment in which to enter [the labor force]. Let’s wait until there is actually a reasonable chance of finding a job before we declare these folks gone forever.” The economy added jobs in professional and business services (+78,000), health care (+37,000), leisure and hospitality (+37,000), and mining. Employment in manufacturing continued to grow as well (+17,000), while employment in state and local government continued to shrink. Local government has lost 416,000 jobs since an employment peak in September 2008. “I think because we’ve seen some pretty decent gains, we can start to get beyond the problem of just saying whether the economy is improving or not, and get more into the hardcore labor market issues,” Silvia said. For Silvia, it boils down to education: in March, the unemployment rate for Americans with a bachelor’s degree and higher is 4.4 percent. But if you take away the college diploma, the unemployment rate rises to 9.5. Of those Americans who didn’t finish high school, 13.7 percent are officially looking for work. The economy has gained more than a million jobs in the past year but is still 7.5 million jobs short of pre-recession levels. Check back here for updates

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Video: Englund Says He’s `Encouraged’ by March Jobs Report

April 1, 2011

April 1 (Bloomberg) — Mike Englund, chief economist at Action Economics LLC, discusses the March U.S. jobs report and the outlook for Federal Reserve policy. Payrolls increased by 216,000 workers last month after a revised 194,000 gain the prior month, the Labor Department said today in Washington. Englund speaks with Betty Liu, Lizzie O’Leary, Michael McKee and Jon Erlichman on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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How Unemployment Is Dragging Down The Housing Market

March 25, 2011

Although the United States population has grown by 120 million people in the past fifty-odd years, today’s new homes are selling at just half the pace they were in 1963. Home sales are being dragged down by the weakness of the labor market and the number of Americans who have grown too discouraged to look for work, economists say. In previous recoveries, the housing market has sometimes buoyed the economy, creating new jobs and driving economic growth. This time, however, the housing market is now lagging behind. Over at Mish’s Global Economic Trend Analysis, a new chart helps bring employment into the housing story by comparing the ratio of annual new home sales to the size of the civilian labor force. See the chart below. The point is simple: while the working age population is steadily rising, the size of the labor force is actually shrinking. And those Americans who have grown so discouraged that they have given up looking for work — around 4.9 million as of last month — are unlikely to be in the market for a house. With construction for new homes all but coming to a halt in February, Americans are on track to buy fewer new homes than in any year since the government began keeping data almost a half-century ago. Mish lays out the problems, as he sees it: • Those not in the labor force are not looking • Those unemployed are not looking • Those afraid of losing their job are not looking • Those in a house and underwater are not looking • Those just out of school and deep in school debt are not looking • Those facing retirement may be looking to sell or downsize • Mortgage standards are much tighter for those who are looking Economists, however, are hard pressed to tie down the exact relationship between a slumping housing market and a weak labor market. “It’s very hard to zero-in in that way,” said Bank of America-Merrill Lynch economist Michelle Meyer. “But one of the major components for why housing demand has remained very soft is because the labor market is very weak. And until we see that really changing, housing sales will continue to be soft.” The more significant problem, for Meyer, is how these two factors taken together — housing and unemployment — indicate an economy still in trouble. “When you think about new home sales, and housing specifically, that obviously ties to what share of Americans are participating in the labor force,” Meyer said. “But you can’t really say that because the labor force shrunk by X amount there is this many fewer homes needed. To me, it’s more of a signal that the fact that the labor force is weak. And that at this point in the recovery, people are still leaving the labor force — that signals to me that the fundamentals are soft.” Federal Reserve Chairman Ben Bernanke has said that it will likely take five years for the unemployment rate to return to pre-recession levels, while a recent report from the Federal Reserve Bank of San Francisco concluded that the unemployment rate, now hovering around 9 percent, may never return to pre-recession levels. Here is the chart from Mish’s Global Economic Trend Analysis, comparing annualized new home sales to the civilian labor force ratio, year over year. (Click image for more detail). More graphs over at Mish’s can be found here .

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Michelle Chen: State Budget Battles Converge on Prison Labor Force

March 18, 2011

Prison isn’t just about doing hard time. For many, it’s about working full-time, too. These days, state governments seem ready to squeeze their captive workforces to plug budget gaps on the cheap. From the chain gang to the gulag, labor in the prison population predates our modern labor regulations and to this day, remains relatively untouched by the legal protections afforded to regular workers. So in most states, prison work has come to be seen as a hybrid between conscript labor and rehabilitation, putting otherwise “idle” inmates to work on farms, manufacturing plants, and janitorial jobs. The New York Times reports that in many areas, laborers in prison uniforms are a growing presence at public work sites, suggesting that they’re being used to alleviate fiscal pressures that are now eroding common public sector services: [O]fficials are expanding the practice to combat cuts in federal financing and dwindling tax revenue, using prisoners to paint vehicles, clean courthouses, sweep campsites and perform many other services done before the recession by private contractors or government employees. In New Jersey, inmates on roadkill patrol clean deer carcasses from highways. Georgia inmates tend municipal graveyards. In Ohio, they paint their own cells. In California, prison officials hope to expand existing programs, including one in which wet-suit-clad inmates repair leaky public water tanks. There are no figures on how many prisoners have been enrolled in new or expanded programs nationwide, but experts in criminal justice have taken note of the increase. As we reported in December, prison labor conditions have sparked some noteworthy revolts. A wave of strikes rocked several prisons in Georgia late last year, touching off a national campaign for the dignified treatment of prison workers. The uprisings shed light on how vulnerable inmates are when the prison-industrial complex operates not just as a warden and dictator but a boss as well, marshalling the labor of thousands with little oversight. The Georgia inmates drafted a list of grievances ranging from abusive treatment to work without wages. The inmates’ direct actions resonated with civil rights groups who have pointed out disturbing continuities between the era of slavery and the racialization of imprisonment, and by extension, the industries tied to it. The mass incarceration of black men, and their punitive deployment—explicitly sanctioned under the Constitution —in the dregs of industrial capitalism, speaks loud and clear to the theory of prison as America’s “ new Jim Crow .” Allegations that prison guards severely beat an inmate protester in retaliation underscore the inequality endemic to this labor system, even though the programs are typically endorsed as a form of rehabilitation and self-help . Of course, today’s prison labor is more regulated and considerably less brutal than the post-Civil War convict-lease system—a regression to slavery disguised as a criminal penalty. ( Some reforms were enacted during the Great Depression to prevent downward-spiraling competition between “free labor” and incarcerated workers.) Yet the institutional parallels are striking. From the late-19th through the early 20th century, southern states, including Georgia, turned to prison labor as a release valve for dealing with fiscal crisis. And the white supremacist power structure, through “leases” with the private sector, enabled forced labor, torture and abuse on a massive scale. How interesting, then, that in this latest economic crisis, states once again seem to be looking to prison as a resource for carrying out various government services. As an inexpensive “public” labor source, a cash-strapped bureaucracy might see inmates as a convenient alternative to, say, real public workers. Particularly the kind of workers who vote, and who have collective bargaining rights , which tend to get in the way of budget deals . Is there any way to get around the historically ingrained perverse incentives to exploit prison labor? A budding campaign in Canada could bridge the civil rights debate and the underlying labor struggle.

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Video: NFL, Union Offer Few Hints of Progress on Labor Accord

March 11, 2011

March 11 (Bloomberg) — The National Football League and its players’ union gave little indication after a 15th day of mediated talks that they’re close to bridging an almost $1 billion a year divide before the scheduled expiration of their labor accord today. The NFL and its union are struggling to agree on how to split up $9 billion in annual revenue, the most of any professional sports league. The labor accord originally was scheduled to end last week. Bloomberg’s Michele Steele reports.(Source: Bloomberg)

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Carol Joyner: Standing up for a Family Friendly Economy

March 9, 2011

Wisconsin Governor Scott Walker’s brazen attack on working families reminds us what a mountain we’ve climbed to get even the most basic rights for America’s workers. We wouldn’t have the weekend, minimum wage, overtime pay, workers’ compensation, the Family and Medical Leave Act — and so forth — if working families and their union allies hadn’t fought for these laws that benefit all Americans. But now, the realities of our changing workplace call for different solutions and new standards. Women represent half the workforce and 70 percent of mothers with kids work outside the home. These stark changes alone result in unprecedented challenges for families. Who cares for children, or elderly and disabled family members, if no one is home? At the same time, working people continue to wrestle with the blunt impacts of the recession. As more of the nation’s wealth gets shifted to the rich and budget cuts threaten the economic security of millions, we have to find new ways to help Americans respond to the 21st Century demands of work and family. Last week, a group of dynamic new labor leaders gathered in Washington, DC to do just that. Working with Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor, Labor Project on Working Families brought together Liz Shuler of the AFL-CIO, Mary Kay Henry of SEIU, Veda Shook of the Association of Flight Attendants-CWA, and Larry Hanley, of the Amalgamated Transit Union to ask: what can we do to make a more family-friendly economy? As the largest representative of working families today, unions have a role to develop strategies that help all Americans achieve economic security and support family life. In her opening remarks, Netsy Firestein, Executive Director of the Labor Project for Working Families, said, “We need to set the bar higher. Every day, working people are still forced to choose between their jobs and their families, but through collective bargaining, legislation, and organizing, unions have a key voice in the fight for better conditions for working families.” The to-do list is long: flexible workplace schedules, childcare services, organizing home care workers, paid family and sick leave — we have a long way to go to make our economy family-friendly. A new Human Rights Watch report just hammered home how behind-the-times we, as a country, are. At least 178 countries have national laws guaranteeing paid leave for new mothers — the handful of exceptions includes the U.S., Swaziland and Papua New Guinea. About 40 million private-sector workers in the U.S. lack paid sick leave, also a standard in the rest of the industrialized world. People are working longer and harder, balancing child rearing, career goals and often two or more jobs — but the laws of the workplace are not keeping up. The good news is that we are making strides. A recent study found that California’s paid family leave program — the first of just two in the country — has been a resounding success with businesses and employees. The same for paid sick days in San Francisco, the first jurisdiction in the country to implement paid sick leave for all workers. President Obama has proposed $23 million in his budget to help states set up paid family leave initiatives, and a new guide we created lays out concrete steps states can take to create their own paid leave programs. Too often today, family values end at the workplace door, but work and family are no longer separate worlds. In her closing remarks, Mary Kay Henry of SEIU reminded us that, “this panel represents what the fight in Wisconsin is all about.” Workers’ rights mean flexibility in the workplace — so you don’t have to choose between your health or family and a paycheck. And that means unions are more important than ever to help us rebuild an economy — a family-friendly economy — that works for all of us. Carol Joyner is National Director of Public Policy at the Labor Project for Working Families. She is founding director of SEIU’s 1199 Employer Child Care Fund and lives in Washington, DC with her family. This blog comes from MomsRising.org and CustomFitWorkplace.org . Each week it presents innovative ideas to strengthen 21st Century American families through public policies, business and workplace practices, and cultural change.

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Video: Sperling Says U.S. Jobless Rate `Positive Step Foward’

March 4, 2011

March 4 (Bloomberg) — White House National Economic Policy Director Gene Sperling talks about the February U.S. jobs report released by the Labor Department today. The U.S. jobless rate unexpectedly fell to 8.9 percent in February, the lowest in almost two years, and employers added 192,000 jobs in a sign of growing confidence in the recovery. Sperling speaks with Peter Cook on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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Video: Payrolls Rose 192,000; Jobless Rate at 8.9% in February

March 4, 2011

March 4 (Bloomberg) — U.S. employers added 192,000 workers in February, amid an improving economy and more seasonable weather, and the unemployment rate unexpectedly declined to 8.9 percent, the lowest level since April 2009. The gain in payrolls followed a 63,000 increase in January and compared with the 196,000 median estimate of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. Bloomberg’s Lizzie O’Leary reports. (Source: Bloomberg)

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Video: Payrolls Rose 192,000; Jobless Rate at 8.9% in February

March 4, 2011

March 4 (Bloomberg) — U.S. employers added 192,000 workers in February, amid an improving economy and more seasonable weather, and the unemployment rate unexpectedly declined to 8.9 percent, the lowest level since April 2009. The gain in payrolls followed a 63,000 increase in January and compared with the 196,000 median estimate of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. Bloomberg’s Lizzie O’Leary reports. (Source: Bloomberg)

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Layoffs Reach 11-Month High, But They’re Not The Major Worry

March 2, 2011

The number of planned layoffs in February rose to an 11-month high according to data released Tuesday, but economists think it’s too soon to say whether this is indicative of a broader slump in the labor market. According to a separate survey released Wednesday — the ADP National Employment Report — private-sector payrolls added 217,000 jobs in February. Layoffs rose to 50,702 in February, according to outplacement firm Challenger, Gray & Christmas, a 20 percent increase over the same period last year. Taken together with the ADP numbers, the picture painted by Challenger’s layoff report is not so bleak. But the ADP numbers have diverged widely from official job data for the past several months. In January, ADP reported an increase of 187,000 private sector jobs. The BLS reported only 36,000 new positions, public and private sector. (On Friday, the Bureau of Labor Statistics will release the government’s official unemployment report for February.) Additionally, there’s reason to believe February’s layoff surge, while disturbing, may not be that bad. “Even if the job market was humming right now like it was in 2007 you’re still going to see layoffs every month,” said Wells Fargo economist Jay Bryson. “When you look at the total number of jobs lost relative to where we were in 2009, these numbers are very low right now.” In May 2009, the last month there was a year-over-year increase, 111,182 jobs were lost. “There’s an issue with the labor market right now, but it’s not layoffs,” Bryson said. “The issue is, at least up to this point, many businesses have not started to hire folks.” In his firm’s report, CEO John A. Challenger said that while it was too soon to say whether the increase in layoffs in January represents a trend, rising oil prices could prove to be a looming challenge in the labor market. “Certainly the specter of rising gas prices could impact employers’ staffing decisions over the next six months,” Challenger said. “At the very least, rising energy costs could force employers to postpone hiring plans. At worse, increased costs could kill the fragile recovery and spur another round of layoffs.”

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Irene Aldridge: Who Benefits From Rising Inflation?

February 18, 2011

On Thursday, February 17, 2011, the U.S. Bureau of Labor released the latest inflation figures. Inflation, measured as a change in the Consumer Price Index (CPI), registered a slight decline at 0.4% this past month (as compared to 0.5% realized in the previous month), and just 0.2% when food and energy are excluded from the calculation. However small these numbers may seem, the figures sounded plenty of alarms in the last couple of weeks. Some commentators declared this inflation to be unhedgeable (due to traditional inflation hedges such as gold being overpriced), and, therefore, unmanageable. Numbers, however, tell a different story, and as this article shows, inflation has some lucrative and natural hedges in today’s markets. Results of a basic event study on the impact of CPI changes on equities produce clear and stunning evidence that inflation is indeed healthy for many stocks and their investors. Among all equities susceptible to rising CPI, those most affected are shown in Table 1 along with their quantitative price responses to every 1% in monthly inflation figures. With probabilities of the response hitting 99.9%, the numbers speak loud and clear that inflation is great for at least two large sectors of the U.S. economy: financial services companies and commodity companies. Table 1. Quant response of prices of selected firms to a +1 change in CPI. (Probabilities of the response are reported in parentheses). Symbol Expected Response on Day 0: the day of the CPI announcement Expected Response on Day 1: the day after the CPI announcement Expected Response on Day 5: one week after the CPI announcement Expected Response on Day 10: two weeks after the CPI announcement Expected Response on Day 21: one month after the CPI announcement APC +4.7% (99.9%) +7.5% (100.0%) +6.1% (99.6%) +6.1% (92.0%) +17.1% (95.6%) ANR +1.2% (87.8%) +10.5% (99.9%) +10.6% (96.9%) +4.1% (74.1%) +18.2% (82.8%) ACI +2.2% (98.1%) +7.9% (99.8%) +5.4% (95.4%) +6.8% (90.6%) +22.2% (99.3%) CCJ +1.7% (99.6%) +3.9% (99.4%) +7.1% (99.7%) +7.0% (88.4%) +13.9% (87.6%) BK +4.8% (99.3%) +8.3% (100.0%) +1.9% (84.3%) -5.1% (71.1%) +10.6% (95.8%) AXP +5.2% (99.6%) +6.5% (99.6%) +8.7% (99.9%) -0.8% (50.6%) +33.5% (99.5%) First, about commodity companies. True, prices of many commodities like gold and cotton are at their near-record levels and can be hardly helpful for inflation hedging. Other commodities, however, are still fair game, as the numbers show. In particular, petroleum companies (i.e. Anadarko Petroleum: APC), coal producers (i.e. Alpha Natural Resources: ANR, Arch Coal: ACI), aluminum handlers (i.e. Alcoa: AA), and even uranium suppliers (i.e. Cameco: CCJ) persistently rise following increases in inflation. Increasing the concentration of these and similar stocks in one’s portfolio is likely to provide a hedge against inflation. Then, there are the financial services companies like the Bank of New York Mellon Corp. (BK) and American Express (AXP) that statistically benefit from rising inflation. How so? The simplest explanation can be found in the lending rates of these firms: with higher inflation, the banks tend to charge higher nominal rates from their customers, capturing a larger spread between the rates at which they lend and the rates at which they borrow. Popular banking products with variable interest rates such as credit cards, are subject to a rate hike, generating a fair premium for banks. Whether one likes it or not, banks are in a lucrative position as far as inflation is concerned. How good of a hedge can financial services or commodity companies provide? As Table 1 shows, both sets of firms take well to inflation. For example, in response to a 1% monthly increase in the CPI, the price of the Bank of New York Mellon (BK) on average rises by nearly 5% on the day of the CPI announcement and by over 10% in one month following the announcement, with over 95% statistical confidence. Allocating just a fraction of your portfolio to the inflation-driven stocks may be sufficient to immunize your entire portfolio. While fretting about the onset of inflation and speculating about its ramifications in the fundamental space, why not hedge it based on quant analysis?

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Shira Hirschman Weiss: ‘Are You There God? It’s Me, Jobless’

February 17, 2011

Last Thursday, the Labor Department released data stating that the number of new unemployment applications is at its lowest since July 2008. While this indicates the economy is picking up speed, the news can either be a beacon of hope or salt rubbed into wounds for the presently unemployed. Faith is in a precarious perch for the religious and jobless. While some become despondent from repeated rejection and thwarted efforts, others cling to faith and turn fervently to prayer. Deirdre McEachern is a career coach who says she sees clients “whose faith has been enhanced and re-affirmed by the job hunt.” One of those clients, Jennifer Bindhammer, was a flight attendant with United in September 2011. “She came to me in early 2002 re-evaluating her life,” explains McEachern. “We worked together for several months and in the process she reconnected strongly with her personal faith. Once she deciphered her life purpose, she felt as if God was opening doors for her — helpful coincidences kept appearing — like the sign she spotted on a subway platform advertising an MBA program.” This literal and figurative ‘sign’ led the flight attendant to pursue her MBA. In the process of contemplating the switch to a corporate profession, Bindhammer — no stranger to the friendly skies — turned to the heavens . “I enjoyed flying and I enjoyed my job, she writes in a testimonial, “It just wasn’t the challenge that I wanted it to be, and realized that I needed to be challenged. When I thought about changing careers, I prayed about it — I actively prayed .” Bindhammer followed her passion, received her MBA and kept praying. She is now working with an international air transport consultancy that focuses on aviation. While the former flight attendant’s faith was reaffirmed, Fiona (not her real name) reflects on how she sunk into a deep depression when she was laid off from a Public Relations start-up during the late 90s “dot bomb” era. She stopped praying and began spending Friday nights at local bars instead of the synagogue. She could have benefitted from an organization like Project Ezrah, had it been around at the time. The North Jersey based organization was founded in 2001 to aid members of the Jewish community (and now helps Jews and non-Jews alike) who were suffering from the hardships of unemployment. Rabbi Yossie Stern, Executive Director of Project Ezrah, has seen individuals like Fiona who have been turned off to the synagogue experience, who are angry with God, and who are depressed about their situation to the point of losing faith. His organization has put together programs to help those who feel despondent. Notably, it developed initiatives to professionally retrain unemployed baby boomers. “When your brother is impoverished, you have to be able to empower him to be self sufficient,” he explains, “The highest form of charity is being able to afford someone a job, to help him achieve the same sense of self-esteem and quality of life that you have.” His organization provides a wide range of services including a popular job board, career counseling services, financial counseling, mental health counseling, job training, and “in the box and out of the box services. We try to provide it all,” Stern says. There is also a LinkedIn group that includes seminars on how to use social networking to find a career and much more. “We empower people to network, which is the best way to find employment.” Fiona eventually found her way back to a public relations career and to the synagogue, but admits that she felt at odds with her faith when things were uncertain: “I didn’t feel it was God’s fault,” she explains, “It was related to a sudden, dark depression, which came about from my unemployment.” And which, she admits, also may have been related to the fact that she was in a bad relationship at the time. “When life is unstable, it contributes to the instability of unemployment.” Rabbi Stern stresses that it is critical that spouses be encouraging and not place blame due to unemployment. He emphasizes that a support system and building of confidence is essential to one’s job hunt. While Fiona received counseling for her depression, she realized she needed to make significant efforts to find a new job. “The Hebrew word Hishtadlut kept flashing through my head,” she says. Hishtadlut means that one must make their own efforts. It relates to the universal concept of “God only helps those who help themselves.” We frequently hear news stories of people who take out billboards on major highways declaring “Hire Me!” While some may cringe, others applaud the bravery of these individuals … Then suddenly, they’re on Oprah. There’s no question that personal efforts need to be extended, that while you may pray for a miracle, divine intervention is a hand reaching across to meet the other hand — that of personal, human intervention. This may be the reason why video producer Richard Lucas is going public with his job hunt: “I’m using my faith to find my next job and blogging about it ,” he tells me, “I’m letting God lead me to new people and places (driving from New Hampshire to Southern California) in the belief that He will lead me to my next job. I’m not there yet, but the journey has just started and I’m only as far as Virginia.” Prior to his big road expedition, Lucas held jobs in radio, television, high tech marketing and sales. He also owned a repair business in Southern California and most recently, a small video production house in New Hampshire. “I couldn’t drum up enough business to get a profit out of the video business so I moved to southern New Hampshire and stayed with my brother for 4 months, looking for work but no joy,” he says. “My plan was to go back to Southern California where there are more video jobs and I have a larger personal network. My faith in God is strong and I believe that on the road trip back to LA, God will show me opportunities along the way. In fact, He did just that at a church in Virginia. I’m staying here now (in VA) for a few days to do video projects while recording segments for a documentary project on miracles.” Lucas says that he believes “God is guiding me to do these things. He will lead me to a new job or even a new career. It may be in Southern California or it or it may be somewhere else. I’m completely walking in my faith here. I’m quite certain that without that faith I would not have the direction and optimism that I currently possess with regard to the future.” Rabbi Stern and other religious leaders applaud this type of optimism. As Stern says, “Everyone in this world gets challenged and there are bumps, the question is ‘how do we deal with the bumps’?” As a clinical psychologist, Dr. Randy Gilchrist is able to make his own observations about faith and unemployment: “From what I have seen, people who are unemployed do tend to go through a definite trial of their faith. Common questions they may ask themselves during that period: ‘I’m a good person, why would God allow this to happen to me?’, ‘Am I being punished’, or ‘What did I do to deserve this?’ (as if God were punishing them personally). In these cases, one’s faith is tried, strained, and sometimes lost if a resolution is not forthcoming. On the other hand, others who have a belief in God that better allows for apparent unfairness tend to do much better in challenging circumstances like job loss and extended unemployment. They may even have their faith strengthened through the experience. In these cases, they may ask themselves an entirely different question, such as, ‘how will this situation strengthen me?’, ‘what better opportunity is God preparing me for’, ‘how will this help me develop character?’, or even, ‘how will this circumstance allow me to better serve God or others?’. ” In other words, Gilchrist feels that different conceptualizations of God and varying extents of belief will largely determine the response, which “could go either way.” Bob Pautke of the Cincinatti, Ohio based Job Search Focus Group (JSFG) which meets in the Hyde Park Community United Methodist Church, says he doesn’t see a loss of faith in members but the opposite: “They are taking the time to better understand their selves and their gifts, bringing them to a stronger faith.” He says he has seen congregants, who are frustrated and seemingly desperate, turn to faith as a source of hope and direction as they attend weekly support meetings to hear advice from experts and peers. Across the U.S., other churches, synagogues and places of worship now offer programs and services to the unemployed, ranging from networking events to career and mental health counseling, motivational speakers and more. Rabbi Aharon Ciment of Congregation Arzei Darom in Teaneck, NJ, jokes that he is like Sy Sperling, the president of Hair Club for Men, who famously declared in the late ’80s commercials “I’m not only the hair club president, but I’m also a client.” Ciment can relate to congregants in need because there was a time when he too was out of work. Now about to receive his Masters in Mental Health while teaching high school students, Ciment says he would not have considered the idea of going back to school had he not lost his old job and realizes now that it was divine intervention. He echoes what Fiona stresses about Hishtadlut . During his period of unemployment, he made every effort to look for a new job. In addition, he says, one must have Emunah — belief, to go along with one’s personal efforts. “Never lose hope,” he stresses, “God remembers all of us.”

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Wisconsin Governor Threatens To Fight Union Protest With National Guard

February 15, 2011

State workers in Wisconsin are protesting a move by Republican Governor Scott Walker to use the threat of the National Guard to break the public union. Citing a $137 million budget deficit, Walker announced a plan last week which would essentially take away the public union’s collective bargaining rights and slash benefits for state employees. Meanwhile, the share of corporate tax revenue funding the state government has fallen by half since 1981 and, according to Wisconsin Department of Revenue , two-thirds of corporations based in state pay no taxes. In the case of a walkout, Walker has put the National Guard on alert. On Monday he told reporters that the guard is “prepared” for “whatever the governor, their commander-in-chief, might call for.” Wisconsin is one of a growing number of states facing severe budget cuts and difficult choices regarding public unions. But as Bloomberg News points out , the biggest savings Walker is proposing have nothing to do with state workers or collective bargaining. Walker claims the state can save $165 million by the end of next June simply by restructuring its existing debt. “I’m just trying to balance my budget,” Mr. Walker told the New York Times last week. “To those who say why didn’t I negotiate on this? I don’t have anything to negotiate with. We don’t have anything to give. Like practically every other state in the country, we’re broke. And it’s time to pay up.” The Republican Party of Wisconsin has said that Walker’s plan will save Wisconsin $30 million over the next three months and $300 million over the next two years. Union leaders and labor scholars don’t think Walker’s move to crush the union is about the deficit. “If it had simply to do with the budget there doesn’t seem to be a need to eliminate collective bargaining,” said Joseph McCartin, a labor historian at Georgetown University. “In other states where state’s municipalities have faced difficult times, unions have helped negotiate the way forward.” “Denying people’s rights has nothing to do with the budget,” said Michael Uehlein, field director for the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). Uehlein views Walker’s proposal as “an excuse to go after his political enemies” and “the first step that will lead to drastically reduced wages across the state.” Rick Badger, the executive director of AFSCME’s Wisconsin 40 council, one of the most active unions in the state, characterised Walker’s proposal as a “man-made disaster” that is “really about taking away people’s rights and creating a second-class citizen.” Badger is adamant that a compromise could be reached and outraged that Walker has made no attempt to sit down with the unions. “It’s been painted as being all about the money but what this is really about is workers who won’t be able to negotiate health insurance, pension, vacation, hours of work, the arbitration process, just cause or discipline,” Badger said. “[Walker] claims there’s nothing to bargain with. The message we need to get out there is that this could not be further from the truth.” Badger continued, “none of the unions involved in this have said that they would not be willing to make sacrifices. They have said that they are, and they will.” Public and private sector labor leaders in Wisconsin and around the country are joined in opposition of the bill. On a conference call on Monday, conservative and Republican employees across the state spoke out against Walker’s plan. “The right to join a union and collectively bargain is a freedom that people have died to protect. To have anyone threaten to wipe it away with minimal public debate, deliberation or discussion is unconscionable,” said Janice Bobholz, an employee with the Dodge County Sheriff’s Department and a resident of Beaver Dam. The governor’s proposal is especially painful given Wisconsin’s long history of collective bargaining. “[Walker's proposal] really represents a break in a 50-year tradition,” McCartin said. “I think it’s really significant and its implications are frightening for public sector unions not just in Wisconsin but over much of the country.” In Ohio, collective bargaining rights for state workers are no more secure . Republican Senator Shannon Jones has proposed a similar bill to Walker’s, and last month, Ohio governor John Kasich said that if employees strike, “they should be fired.” However, he has not yet threatened to call in the National Guard. “It’s hard to imagine why that had to be raised except to purposely stoke a fire,” McCartin said. “It’s a painful history that Wisconsin has had in that respect and to raise the specter of calling in the National Guard seems totally warranted in this case.” The last time Wisconsin called in the National Guard was in 1886. The Guard, then called the State Militia, were brought in to break a rally of Milwaukee workers advocating an 8-hour work day. The militia fired into a crowd of unarmed picketers; it’s estimated that 5 to 7 workers were killed. Badger is a veteran of the armed forces. He is astounded that the governor has suggested the Guard might be called in. “I volunteered to defend the rights of citizens in this country,” Badger said. It’s really offensive — not the National Guard soldiers — just that the governor could find the time and resources to put the National Guard on alert but not to sit down with any of the unions.” In a press release put out by VoteVets.org, an outreach group devoted to veterans issues, a veteran and former National Guard member shared his unhappiness with the Governor’s proposed solution to a union strike. “Maybe the new governor doesn’t understand yet – but the National Guard is not his own personal intimidation force to be mobilized to quash political dissent,” said Robin Eckstein, a former Wisconsin National Guard member, Iraq War Veteran from Appleton, WI, and member of VoteVets.org. “The Guard is to be used in case of true emergencies and disasters, to help the people of Wisconsin, not to bully political opponents.” The governor’s office did not immediately respond to request for comment.

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Gina Harman: Scaling Microfinance: An Economic Imperative

February 11, 2011

These are troubling times, as the spotlight on microfinance has recently led to unfortunate mischaracterizations and a rush to judgment. Emotions have been confused for facts and character assassination is used to negate the very real contributions in the fight against poverty. In the current media cycle, commercialization — rather than unsavory business practices — has been identified as the cause in the case to discredit microcredit. While the lives of hundreds of millions worldwide have been enriched by opportunity once unimaginable, the words of a few threaten to change the opinions of many — a dangerous situation, indeed. The achievements of microfinance on the international stage have been very real, with collective efforts bringing positive change to 150 million of the world’s poor and the industry as a whole aiming to reach the two billion people who lack access to basic financial services. As a recent article in The Guardian made clear : what’s hurting the reputation of the industry is “unscrupulous operators — wolves in sheep’s clothing flying the flag of microfinance, but employing the tactics of loan sharks.” The wholesale refutation of an entire nonprofit and social business sector that has helped millions worldwide is clearly not the answer. As my colleague Michael Schlein suggested in a recent New York Times letter to the editor , the solution is not to abolish microlending — but to demand sound and transparent regulation. As the microfinance industry has grown, approaches have also changed to reflect real opportunities, market differences, pressures, and real grievances. Some of these strategies include commercialization, IPOs and increased competition. Here in the U.S., domestic microlending strives to put the elements of that successful model to work in very different circumstances. From unregulated to highly regulated markets, domestic microlending has grappled with the enormous need — over 10 million small business lack access to fairly priced capital — to grow, sustain or start a business. That lack of access has resulted from many factors from business type, to risk profiles and to the very high cost of delivering both the dollars and the support services needed to improve success. For many years, much of the discussion surrounding U.S. microfinance has been about how different the model and the customers are from the international scene. Those comparisons have focused on the size of the loans made, the presence of banking institutions in the domestic market, loan default rates, and an underlying assumption that the land of opportunity simply provides for those willing to work hard. Though differences exist between domestic and international models, there is also great commonality. Broadly speaking, U.S. and international microlenders share an underpinning philosophy that sufficient access to small business capital can have lasting, positive change on communities and individuals, and be a source of larger social good. Domestic microfinance organizations have grappled with defining a delivery method that will dramatically increase the numbers of businesses they can serve. That means personal relationships that begin at the application and are sustained over the life of the loan, such as providing resources from coaching to networking and financial education. All of this adds costs, and can make scaling to meet that need very challenging. But scale we must because the rewards to the economy, communities, families, and individuals are simply too large for the country to ignore. A Bureau of Labor Statistics report issued in early January showed the economy added 103,000 jobs in December . While these figures were lower than several private surveys had predicted , it is worth noting from where those job gains originated. Local governments shed 10,000 workers in December, state employers neither added nor terminated workers, and corporations didn’t do much hiring, either. That means all of December’s modest gains came from private industry, with most of those new jobs coming from small and midsize businesses. With U.S. hiring making incremental inroads, small business owners and would-be entrepreneurs — many of whom live and work outside of the financial mainstream — will be looking for sources of capital in order to grow. These recent job trends only underscore the importance of domestic microfinance efforts — and suggest how it can play an enormous role in helping to bolster the nation’s economy, providing access to financial resources, education, and training.

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US Dollar Strikes 1 Month Peak against Yen on Labor Data

February 11, 2011

US Dollar Strikes 1 Month Peak against Yen on Labor Data

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Fed Official: U.S. Can’t Grow Out Of Debt Problems

February 10, 2011

(Reuters) The Federal Reserve’s monetary stimulus plan can play a role in bringing down unemployment, even if the country’s jobless rate is unlikely to fall below pre-crisis levels, a top Fed official said. The Fed in November announced a controversial plan to purchase an additional $600 billion in bonds to keep down long-term borrowing costs and stimulate the recovery. Critics of the program have argued much U.S. unemployment may be due to “structural” factors such as skill mismatches, so monetary policy might be powerless to address the problem. However, Atlanta Federal Reserve Bank President Lockhart pushed back against that notion. “There is scope for reducing the unemployment through sensible monetary policy but that will leave probably a higher level of ‘natural’ unemployment … than maybe we enjoyed before the recession,” he said during a panel hosted by the Consulate General of Switzerland in Atlanta. The U.S. jobless rate fell to 9 percent in January from 9.8 percent in November, the biggest two-month decline in more than 50 years. However, hiring remains anemic, Labor Department data show, with only 36,000 jobs added last month. Asked about the problem of debt, the focus of the meeting, Lockhart said the United States needs a credible long-term plan to address bloated budget deficits expected to reach a record $1.48 trillion this year. He said the country cannot expect to simply grow its way out of the problem, arguing the current rate of economic expansion of around 2.5 percent to 3 percent is not nearly fast enough to catch up with the debt. “Although we are in recovery at the moment and we are seeing growth, the economy is expanding, until we have dealt with the underlying fiscal issues we are not growing on absolutely sound foundations,” Lockhart said. Lockhart did cite some encouraging signs for small businesses, saying he was seeing fresh evidence that banks’ reluctance to lend was abating. “What we get in our surveys of lending officers in recent months is some indication of the relaxation of lending terms,” Lockhart said. Copyright 2010 Thomson Reuters. Click for Restrictions .

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Marty Zwilling: Boomers are Driving a New Entrepreneurship Boom

February 10, 2011

Contrary to what most of you might guess, the highest rate of entrepreneurial activity over the last few years is not Gen-Y young upstarts, but Baby Boomers in the 55-64 year age group. In fact, according to a study by the Ewing Marion Kauffman Foundation, these Boomers are actually driving a new entrepreneurship boom. Some people are calling entrepreneurship the ‘new mid-life crisis’ for the 76 million-strong demographic once thought to be over the hill. Partially due to the economy, but also due to longer, healthier lives and changes in job tenure, 62% of working Boomers are now expected to stay in the labor force, with real power and influence, for at least nine more years, to 2020. Here is a summary of indicative facts from the earlier study referenced, an update published last year, and others. These indicate that the correct icon for an entrepreneur may now have gray hair, rather than the warm glow of youth: In every single year from 1996 to 2010, Boomers between the ages of 55 and 64 had a higher rate of entrepreneurial activity than Gen-Y, aged 20-34. The highest growth rate last year actually was the next echelon, Gen-X, 35 to 44-year-old’s. These trends seem likely to persist. In the Kauffman Foundation Survey of nearly 5,000 companies that began in 2004, nearly two-thirds of the founders are now between the ages of 35 and 54. Additionally, Kauffman research has revealed that the average age of the founders of technology companies in the United States is a surprisingly high 39 — with twice as many over age 50 as under age 25. While people under 30 have historically jumped from job to job, another striking development has been a deep drop in the incidence of ‘lifetime’ jobs among men over age 50. With longer life expectancies and greater health in later life, older generations are moving to start new firms — and mentor young entrepreneurs. One new incentive is the falling transaction costs and barriers to entry for entrepreneurs of every age. Half of the Internet users age 50-64 use social media now, an 88 percent growth from the previous year. The number of Facebook users in the US age 55 and older grew from around 1 million in early 2009 to 10 million in early 2010. The immigrant rate of entrepreneurial activity declined slightly in 2009, but remained substantially higher than the native-born rate. Business start-up rates in America increased the most in the Midwest and South. In addition, the Boomer demographic is also creating a slew of new market opportunities, including improved healthcare facilities, construction of senior-friendly facilities, and technical support for seniors, by seniors. What all of this means is that boomers will have more impact and power in the marketplace for a lot longer than most people expected. Since entrepreneurship is a key driver of economic growth, this should bode well for America, and for world economic growth as well. In terms of job creation, innovation, and productivity, entrepreneurs drive growth. Many Boomers have the purchasing power and become enthusiastic early adopters who help lead the way. They are becoming the new early adopters. Of course no one has any idea what the next big thing will be, but more often than not innovation comes from entrepreneurs. If you are one of the Baby Boomers who wants to redefine retirement, now is your chance for real impact. Find an opportunity you understand, follow your passion, and join the entrepreneurial majority.

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10 States Running Out Of Smart People

February 9, 2011

By 24/7 Wall St : There are several states in the U.S. that are losing the education race to most of the others. In the past decade, these states have declining math and reading scores, lower numbers of people with bachelor’s degrees, and comparatively fewer residents who hold white collar jobs. Colorado, Michigan, and eight others are losing this competition to states who have residents that are better educated and who have done a better job obtaining higher quality jobs. These failing states have lost ground compared to the national average. The recent State of the Union address, and almost any sweeping political speech or document that writes or speaks about unemployment and future competition for jobs, impresses the point that a well educated workforce-a smart workforce-has comparative advantages. Regions with better-educated people tend to find it easier to draw and retain businesses. These regions are also likely to be more competitive in contrast to nations around the world like China, which has posted sharp increases in the level of educational attainment among its citizens. Well-educated people find it easier to obtain and keep jobs. American unemployment figures consistently show that the part of the population with high levels of eduction have lower unemployment. This makes sense: skill equals aptitude in most cases. An employer who has to pick between two potential employees is likely to choose the one who reads best, writes best, and has the highest level of educational attainment. There are exceptions to this when jobs require very specific backgrounds, but across the American workforce, which has tens of millions of workers, any employer would want to have an employee who can show his educational background is stronger than that of fellow applicants. An educated employee will not just have an advantage now, but may have more of one in the future. This is one of the reasons 24/7 Wall St. looked at trends over an entire decade. Funds of educational facilities and educators have already been eroded in many states and municipalities by budget cuts. The slow economic recovery and the move toward austerity in Washington is likely to make this trend more alarming. The portion of people who are adults with good educations may actually drop as the capital necessary to maintain a strong educational “infrastructure” is depleted. The portion of the population which is well-educated now may have reached a high-water market, at least for the foreseeable future. The problem that America has begun to lose its education edge is not national, it is local. Americans are not educated nationally. They are educated locally. The problems of a well-educated workforce end up being fought at the state and municipal level, as the 24/7 Wall St. data shows. Just as the problem with education is local, the solutions have to be. The states on the 24/7 Wall St. States Running Out Of Smart People report will almost certainly need resources that are greater than, or at least as great as, states which have better statistics. These are the resources that will allow them to be competitive nationally and internationally. 24/7 Wall St. looked at National Assessment of Educational Progress (NAEP) scores for math and reading in 2003 and 2009. We also looked at the percentage of people in each state with bachelor’s degrees, and their increases compared to the increases in the total populations in their states. We analyzed the Bureau of Labor Statistics data on the portion of each state’s population which has white collar jobs. To supplement the figures which we used in the final analysis, 24/7 also reviewed numbers for high school and graduate school education. This is the 24/7 Wall Street review of the ten states with the lowest education achievement and job levels compared to the other forty-The States Running Out Of Smart People. Which ones are the most surprising to you?

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Michael J. Wilson: Changing the Rules for Workers

February 9, 2011

It’s no surprise that Republicans and their corporate allies are up to their old games. Or, to paraphrase Ronald Reagan, “There they go again!” Having successfully blocked congressional efforts to strengthen the right of workers to organize a union, they now want to stop workers from learning their rights under weak existing labor law. Today the National Labor Relations Act (NLRA) is more valuable in theory than in practice. The law gives American workers the right to join a labor union and lists illegal labor practices. Yet structural weaknesses and unscrupulous employer behavior have eviscerated the law. Employers knowingly violate the law since penalties are a joke, at best. They brazenly break organizing drives by intimidating employees and firing workers who lead the organizing effort and if caught, all the law requires of the employer is to pay the dismissed workers the difference between what they would have earned with the company minus what they earned in their next job after being fired. Employers happily risk such a cheap penalty – which averages $5,000 — to the possibility of having to increase everyone’s wages. For years now, the Democrats in Congress have tried to end this abuse by enacting legislation –the Employee Free Choice Act (EFCA) — which would allow workers to join a union by signing a membership card, just like joining any other organization. The EFCA would also require the employer to recognize and bargain with the union if a majority of the workers signed up. Republicans and Big Business have fought vigorously to prevent the bill from ever coming up for a vote. Meanwhile the National Labor Relations Board (NLRB) has sought to address a small part of the problem by eliminating one obstacle, the lack of information regarding workers’ right to organize. The NLRB has proposed a simple rule that would require employers to post a notice telling workers about their existing rights under the NLRA, just as they must post notices on minimum wage, health, safety, and equal employment opportunity rights. It would neither address the weaknesses in the law nor expand rights under current law. It would simply provide employees with information about their current rights. Needless to say, Republicans and Corporate America are having a hissy fit and lobbying against it, just as they fought EFCA and every other attempt to help workers stand together. The Chamber of Commerce lobby is not content to prevent workers from having real collective bargaining protection; they want to keep workers ignorant of the minimal rights they currently possess. They claim that the NLRB, which would be responsible for enforcement, lacks authority to create such a rule. The truth is that the National Labor Relations Act authorizes the Board of the NLRB to create “rules and regulations as may be necessary to carry out the provisions of this Act”. (29 U.S.C. 156) Court decisions have made clear that the NLRB has the authority. This claim is simply an attempt to keep workers in the dark. The NLRB will be accepting comments on this proposed rule until February 22, 2011. Now is the time to stand up to Big Business and educate workers about their rights.

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Rev. Al Sharpton: Paying for the Crimes of Others

February 9, 2011

On April 4, 1968, the world lost a pinnacle in the fight for humanity when our preeminent civil rights leader, Dr. Martin Luther King Jr. was viciously murdered. Although we are all familiar with his immeasurable struggle for equality and justice, many do not realize that an essential platform for Dr. King’s advocacy was a push for worker’s rights and the necessity of decent livable wages. Today, as states and municipalities across the nation face devastating budget shortfalls, the labor unions and workers that provide necessary services for us all are once again under attack. The state of New Mexico is unfortunately no different, but together we can intervene and protect the ability of workers to peacefully assemble, organize and demand fair benefits. On February 10th and 11th, I will be addressing union members, clergy, community organizers and everyday citizens from across New Mexico to discuss the integral relationship between labor movements and civil rights. Joining me at this pivotal two-day conference will be Lee Saunders, International Secretary-Treasurer for AFSCME (the American Federation of State, County and Municipal Employees). The two central themes of this vital event are: ‘Civil Servants: Pillars of a Civil Society’ and ‘Faces of Public Service: Thanking Those Who Serve Our Community’. New Mexico, like so many states across the nation, is suffering from some of the largest budget deficits in modern times. Facing a shortfall of an estimated $400 million next year, New Mexico’s legislature proposed slashing the state budget and consequentially slashing the basic benefits countless workers dedicated their lives securing. At a time when so many families are struggling to simply put food on their tables, Governor Martinez of New Mexico would like state workers to contribute even more into their own retirement plans. After decades of organizing and pushing for fair pay and decent benefits, those that provide many of the services all New Mexicans greatly rely on are once again being asked to pay for the crimes of others. When the economic recession of 2008 struck the nation, virtually everyone agreed that Wall St. excesses and corporate greed created a dangerous scenario by which the rich continued to amass wealth, and the working-class/poor suffered increased financial hardship. And today, as unemployment remains disturbingly high, foreclosures continue at alarming rates and the average citizen has to stretch his/her dollars even further, why is the responsibility of rectifying our budgets being unfairly placed on workers? Why must unions be forced to resort back to the days when individuals had no rights and employers could systematically oppress and take advantage of whomever they pleased? And when workers were not the ones responsible for the worst financial calamity ever witnessed since the days of the Great Depression, why must they be the ones to continuously bear the brunt of sacrifice? On the eve of the horrific murder of Dr. King in Memphis, Tennessee in ’68, he addressed sanitation workers and public employees who were members of the local chapter of AFSCME. Fervently pushing for their ability, and the ability of all across the country to organize and demand livable wages, Dr. King gave his life in the struggle for human dignity for all peoples. As Lee Saunders and I gather with union workers and community organizers in New Mexico, let us keep Dr. King’s vision and passion alive just as it was decades ago. When states and municipalities work to salvage their budgets, let’s ensure that the burden isn’t unjustly placed on those that are already suffering the most under these tumultuous times. Let us stand in unison once again.

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For-Profit College Recruiters Taught To Use ‘Pain,’ ‘Fear,’ Internal Documents Show

February 8, 2011

Newly-released internal training documents from several for-profit colleges illustrate a culture that encourages recruiters to increase enrollment by focusing on emotions such as “pain” and “fear” to attract low-income students who are struggling with adverse personal and financial circumstances. The documents, obtained by a Senate oversight committee, shed light on the high-pressure recruiting tactics employed by some for-profit schools to increase enrollment numbers and the profits that come from federal student-aid dollars. “Remind them of what things will be like if they don’t continue forward and earn their degrees,” reads one document obtained from ITT Technical Institute, a for-profit school with more than 100 campuses across the country. “Poke the pain a bit and remind them who else is depending on them and their commitment to a better future.” The Senate Health, Education, Labor and Pensions Committee has conducted a series of hearings probing the for-profit education sector during the past year. Sen. Tom Harkin (D-Iowa), who chairs the committee, referenced the documents in a Monday-evening speech on the Senate floor. For-profit colleges are facing increased scrutiny and new regulations amid growing evidence of aggressive and deceptive recruiting tactics and a disproportionate number of students defaulting on federal loans. Critics of the industry have pointed to the tremendous amounts of money such schools spend on marketing and recruiting in order to get more students — and their federal aid funds — in the door. Harkin’s committee has requested a series of internal training documents from numerous for-profit schools. Among the more eye-opening materials turned over to the committee were training guides from ITT and Kaplan University , which is owned by The Washington Post Co. (Read our look at Kaplan’s questionable tactics here .) The ITT training documents laid out a “Pain Funnel and Pain Puzzle” that describes a series of questions recruiters should ask prospective students in order to “poke the pain” and convince them to sign up for classes. “Level 1 Pain” questions focus on telling the story of a student’s performance in high school or in getting a GED. The recruiter is then instructed to continue probing, asking questions such as “What has not having a college education cost you?” and “What are you willing to change now, or have you given up trying to deal with the problem?” A similar document from Kaplan University encourages recruiters to “Keep digging until you uncover their pain, fears and dreams” and to “Get to their emotions and you will create the urgency!” The internal training guides shed light on recruitment methods that have long been criticized by student-advocacy groups as preying on uninformed, uneducated students who may have little chance of success once admitted to the schools. A Kaplan spokeswoman said the company discontinued the recruiting guide mentioning “pain” and “fear” last year. She pointed to a new company policy that allows students to withdraw free of charge within four or five weeks if they are not satisfied with the program “When students are enrolled through deception or fear, they are less prepared to meet the challenges of college,” Harkin said Monday evening on the Senate floor. “Rather than offering students a better life, these types of strong-arm, emotionally abusive tactics are all too typical of schools that have little or no interest in providing students the academic help and support they need for the students to succeed.” A Senate report released last year found extremely high turnover rates for students in the for-profit sector: 57 percent of students had withdrawn within a year, according to an analysis of students at 16 large for-profit schools between July 2008 and June 2009. A document obtained from a privately owned for-profit school, Vatterott Educational Centers Inc. noted that, “We deal with people that live in the moment and for the moment. Their decision to start, stay in school or quit school is based more on emotion than logic. Pain is the greater motivator in the short term.” Another Vatterott document described the target market for recruiters: “We serve the UN-DER world, Unemployed, Underpaid, Unsatisfied, Unskilled, Unprepared, Unsupported, Unmotivated, Unhappy, Underserved!” Officials at ITT and Vatterott did not respond to requests for comment Tuesday afternoon. Students at for-profit schools represent less than 15 percent of college enrollments nationwide, but take in a quarter of federal student-aid dollars and account for nearly half of all student loan defaults, according to data released last week by the Department of Education. A quarter of all students enrolled at for-profit schools defaulted on student loans within three years — more than twice the rate of students at public nonprofit colleges. Numerous corporations that own for-profit colleges — including the Apollo Group, which owns University of Phoenix, and Corinthian Colleges Inc., which runs the Everest College chain — derive more than 85 percent of their revenue from federal student aid. Read the “Pain Funnel” page from an ITT Tech training manual and read the full documents from the floor speech below: Below, the “Kaplan document”: And the Vatterrott College document, detailing sales targets: Read the full documents from the floor speech: Recruiting documents –

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The Big Problem For Young Workers: Getting A Full-Time Job

February 7, 2011

NEW YORK (By Kristina Cooke) – Shanee Greenidge of Boston has been searching for full-time work since she dropped out of high school in 2009 and took a string of part-time jobs to help her mother pay bills. “I’m looking for any type of full-time job. I don’t care what it is, I really need something,” said Greenidge, 20. Her situation is typical of millions of young Americans caught up in the aftermath of the country’s deepest economic crisis since the Great Depression. Greenidge has held a number of part-time jobs in the past two years, including work as a landscaper, but nothing to put her on a permanent career path. Even for part-time retail jobs, she said, she is competing with people with college degrees or years of experience. “There’s a lot of competition. It sometimes feels like I don’t stand a chance,” she said. The number of Americans working part-time because they cannot find a full-time job or because their hours were cut more than doubled from around 4 million in 2007 to more than 9 million in 2009. The number is edging lower, but as of January 2011, 8.4 million were still working part-time because of the weak economy, according to U.S. payrolls data issued on Friday. The U.S. unemployment rate has fallen to 9 percent, but if involuntary part-time workers and people who are not actively looking for work are counted, it stands at 16.1 percent, according to government data. Andrew Sum, an economics professor at Northeastern University in Boston, said past recessions suggest it will take several years to make a significant dent in the number of underemployed Americans. “It takes really strong three or four years of growth until you get a big push down in this number,” he said. “There are a large number of employers who are not sure about future demand. So they want to keep the cost down.” But the cost of being underemployed is “huge,” both for those desperate for more work hours — who tend to be young adults, less-educated and blue-collar workers — and the broader economy, Sum said. Most part-time employees work half the hours of full-time employees and often do not have benefits such as health insurance and pensions, Sum said. That puts a strain on already stretched public services. Underemployed workers tend to get less training at work and earn less in the future than full-time colleagues, he said. These lower earnings hold back their spending on goods and services, which drives the U.S. economy. Part-time workers on low incomes are also more likely to need social services such as food stamps, even as their lower wages and expenditures reduce their tax contributions, adding to U.S. fiscal strains. Neil Sullivan, executive director at the Boston Private Industry Council, said the difficulty young people have getting a firm foothold in the job market is especially worrying. “Disconnected youth are the ones that do the most harm to themselves and the community,” Sullivan said. “You can find them on the street corners all around urban America and there are few prospects for them apart from part-time retail.” NO EXPERIENCE, NO JOB Melissa Rodrigues, 25, who recently graduated with a bachelor degree in sports sciences, works part-time looking after children at an after-school club while she looks for a permanent job. Many peers who graduated with her, she said, are waitressing or going back to school. “I’ve applied to a lot of places, but they want experience. They want two years, for everything,” she said. Even those with more experience can find it tough to regain their footing in the labor market. Beth Tarbell, 46, was laid off from her job writing procedures and safety manuals for the restaurant industry in Austin, Texas, last spring and since then has been working part-time, off and on. “I’m getting a bit nervous now,” she said. “I know people who are sleeping on other people’s couches and I am hoping I don’t become one of them,” she said. “I’ve had a former boss tell me, ‘I wish we could afford to bring you on full-time but we can’t.’” Copyright 2010 Thomson Reuters. Click for Restrictions .

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